UK flies cash to Cyprus for soldiers

Cypriot members of parliament rejected a controversial bailout agreement.

Story highlights

The UK is flying in money for British military families who may be affected by the bank chaos

The banks have been shut since the Cypriot government initially agreed to impose a tax on deposits

Without an international rescue, the banking system in Cyprus is at risk of collapse

Britain, which has longstanding ties to Cyprus, maintains two military bases on the island

The UK is flying €1 million euros of cash into Cyprus for British soldiers and their families who might run short on money because of the bank chaos roiling the island nation.

In a statement, UK defense officials said Tuesday that the money would be used to provide emergency loans in case cash machines and debit cards stop working on the Mediterranean island.

Banks in Cyprus have been shut since the weekend, when the Cyprus government agreed to impose an unprecedented tax on deposits to secure a €10 billion bailout from the European Union. That move prompted a run on cash machines.

"We're determined to do everything we can to minimize the impact of the Cyprus banking crisis on our people," the British government said.

Without an international rescue, the banking system in Cyprus is at risk of collapse under the weight of its exposure to losses on Greek debt.